What I'd heard (some years ago) was that cigarettes helped to soften the blow of phenothiazine-based drugs (Thorazine, Stelazine, etc.) that are commonly given to schizophrenics. These drugs work by removing L-dopa from the brain, and depressing the forebrain, thus making the subject more tractable and easy to deal with in institutional situations (the so-called chemical straitjacket, lobotomy in a pill, etc.) Marketed to doctors as "insulin for schizophrenics", they, indeed seem to work for a while: the subject becomes peaceful, and nearly unemotional, easily suggestible, and with few thoughts of their own. Higher cognition becomes more difficult: it's not unusual for someone on these drugs to go from, say, playing classical piano to watching, with interest, "Dancing with the Stars".
However, a few months later, side effects usually begin to occur: tics and twitches, a ravenous appetite, which coupled with the disinclination to move, quickly produces extreme obesity (and ironically Type 2 diabetes), and a pernicious apathy that slowly extends itself to jobs, appearance, other people and life itself. Worse, trying to get off these drugs means that psychotic symptoms reoccur, even worse than before, as the body's L-dopa production often has increased to unnatural levels. While it's true that some patients can function, and sometimes quite well, under these circumstances, the truth is that most of them do not, and the simple equation Psychotic - (L-dopa) = Normal simply does not hold up.
What nicotine, and to some extent, alcohol does is to increase L-dopa to a slight degree, but not as much as simply going without the drugs, and it does so fairly quickly. Part of the problem with the neuroleptics is that brain hormone production and consumption varies from moment to moment -- what would be "too much", say, waiting for a bus, would be "not enough" dancing at a lively party, brainstorming a new product, or trying to organize housework.
Without getting all Tom Cruise on you, I don't think that they're using the right angle.